Binance.US Market Depth Declines 76% in June Following SEC Lawsuit

Binance.US’s market depth has dropped in June as market makers are fleeing the exchange following the SEC’s lawsuit.

AccessTimeIconJun 12, 2023 at 3:29 p.m. UTC
Updated Jun 12, 2023 at 3:34 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Binance.US is witnessing market makers and traders flee the exchange en masse following last week’s U.S. Securities and Exchange Commission lawsuit against it, alleging multiple securities violations.

Just one week after the lawsuit, liquidity, which is measured by aggregated market depth for 17 tokens on Binance.US, has dropped 76%, according to a report by Kaiko. The U.S. arm of Binance also saw its U.S. market share drop to 4.8% from 20% in April.

The day before the lawsuit, June 4, market depth was at $34 million, whereas on Monday, market depth was at $7 million, according to the report.

The SEC sued Binance, the operating company for Binance.US and founder and CEO Changpeng "CZ" Zhao. Binance global also witnessed a drop in market depth, dropping 7% since the start of June.

“Binance's market depth initially held steady, even increasing in the immediate aftermath of the lawsuit, but over the weekend fell as altcoin markets sold off,” said the Kaiko report.

Binance isn’t the only exchange suffering from a drop in market depth. U.S.-based Coinbase, which was also sued by the SEC last week, saw its liquidity drop by 16% over the same time period.

“The sharp drop in liquidity suggests market makers are nervous and want to avoid volatility-induced losses and the non-negligible possibility that their assets could get stuck on an exchange à la FTX collapse,” said the Kaiko report.

The report noted that although Binance.US’s market share dropped to 4.8% in June, Coinbase’s market share increased over the past week from 46% to 64%, for reasons that are unclear, said Kaiko.

Kaiko


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.